EU fines Microsoft €561 million for not giving users a browser choice

Microsoft's "technical error" violated antitrust agreement for more than a year.

The browser choice screen displayed to European Union users of Windows.

Peter Bright

European regulators today fined Microsoft €561 million (or $732 million) for failing to offer Windows users a choice of Web browsers as the company had been required to do.

A previous antitrust agreement required Microsoft to present users a choice of Web browsers in addition to its own Internet Explorer, such as Firefox, Chrome, Opera, and Safari. Microsoft did so for most versions of Windows, but an apparent accident caused the browser ballot to be stripped out of Windows 7 when its first service pack was released.

Microsoft admitted to the mistake last year, attributing it to a "technical error." The browser ballot screen was missing on Windows 7 from May 2011 until July 2012, although users could still change their default browser in Windows settings. Microsoft confirmed the mistake and distributed a software fix after EU officials notified the company of reports that users weren't being offered the browser choice.

Today's fine is the first time EU regulators "have punished a company for neglecting to comply with the terms of an antitrust settlement, and it could signal their determination to enforce deals in other cases, including one involving Google, where such an agreement is under discussion," the New York Times said.

Microsoft reiterated today that it accepts responsibility for the violation. "We take full responsibility for the technical error that caused this problem and have apologized for it," Microsoft said. "We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake—or anything similar—in the future."

The European Commission announcement of the fine said Microsoft's mistake meant 15 million European users of Windows did not see the browser choice screen.

"In 2009, we closed our investigation about a suspected abuse of dominant position by Microsoft due to the tying of Internet Explorer to Windows by accepting commitments offered by the company," Commission VP Joaquín Almunia said in the announcement. "Legally binding commitments reached in antitrust decisions play a very important role in our enforcement policy because they allow for rapid solutions to competition problems. Of course, such decisions require strict compliance. A failure to comply is a very serious infringement that must be sanctioned accordingly."

The agreement to provide the browser ballot stemmed from Microsoft's dominant position in the Web browser market and the influence it has over users' choice of browsers as the maker of the world's most widely used operating system. Internet Explorer today holds 56 percent of the worldwide desktop browser market share. Microsoft committed to making the browser choice screen available for five years, until December 2014. While admitting the mistake last year, Microsoft offered to extend the time it will offer the browser choice screen by 15 months. The EU announcement today did not say whether it will require Microsoft to do that, and Microsoft declined to comment on the proposed 15-month extension.

The EU described why it believes the choice screen is important and why the fine was necessary:

The choice screen was provided as of March 2010 to European Windows users who have Internet Explorer set as their default web browser. While it was implemented, the choice screen was very successful with users: for example, until November 2010, 84 million browsers were downloaded through it. When the failure to comply was detected and documented in July 2012, the Commission opened an investigation and before taking a decision notified to Microsoft its formal objections in October 2012.

This is the first time that the Commission has had to fine a company for non-compliance with a commitments decision. In the calculation of the fine the Commission took into account the gravity and duration of the infringement, the need to ensure a deterrent effect of the fine and, as a mitigating circumstance, the fact that Microsoft has cooperated with the Commission and provided information which helped the Commission to investigate the matter efficiently.

The EU could have fined Microsoft up to 10 percent of its "total turnover in the preceding business year." Microsoft's fiscal 2012 worldwide revenue was $73.72 billion and its operating income was $21.76 billion. Microsoft's cash reserves total $68 billion.

The Times noted that fines levied by the EU are usually much lower than the maximum allowed. "The largest fine ever levied by the European authorities in an antitrust case was €1.1 billion, or $1.4 billion, in 2009 against Intel for abusing its dominance in the computer chip market," the Times wrote. "Intel is still appealing that ruling."

Microsoft's public statements on the browser ballot error seem to indicate that it will not appeal.

Microsoft implemented the browser ballot screen on Windows 8 for EU users when the latest version of Windows was released last year. Windows RT, the version of Windows 8 for ARM-based tablets and desktops, is more tightly locked down. "Windows RT only allows third-party applications that run in the tightly restricted Metro environment. These restrictions preclude the implementation of high-performance Web browsers," we noted in a story last year. Windows RT is a direct competitor to the iPad, which also places restrictions on third-party browsers.

Microsoft won't be forced open up Windows RT. Last October, Almunia said, “We have looked at Windows RT and on the basis of our investigation so far, there are no grounds to pursue further investigation on this particular issue."

170 Reader Comments

Between what I've read about Google's and other tech companies' problems... and those faced by the company I work for with VAT and such... it's starting to seem like the only viable business strategy for American companies in Europe is to stay the hell out.

How did you do in 2nd-grade math? The proportional fine against Microsoft is minuscule, relative to their annual revenue & profit.

It's obvious that they tried to bamboozle the EU, and got caught. Could you imagine IBM or AT&T violating their consent decrees after their past anti-trust convictions...? (If an actual person violated their probation, they can't just flip a quarter at the judge and say, "Let's call it even, OK?" but multi-national corporations can.)

First off, Wheels of Confusion, you're basically trying to reason with people that sound like they were born yesterday and can look at only the past 5 years or so. Screw facts and focusing on a larger picture. +1 for trying though.

BajaPaul wrote:

This is nothing but an EU shakedown for money to temporarily finance their bankrupt socialist governments. I am sure Ballmer and company are really pissed off but they are just rolling over on this. It is the cost of doing business in the EU. Just consider it another bribe or graft needed to grease the wheels of commerce in the EU.

Yes, damn commie socialist governments punishing 'MURICAN free capitalist corporations for their misbehaviour and driving competitors off the market. Also screw following the law of the land, cause 'murican law applies everywhere. Praise the greatest country in the earth and its corrupt and anti-competitive corporations. Here's a pro tip, respecting the law in the countries you're doing business in doesn't get you into trouble, and you wouldn't have to pay fines (or "bribes" as you call them).

Quote:

Ironically, Microsoft wasn't going to bundle any browser in the EU when the EU made a big stink of this. But the EU didn't like that!

Oh, we liked it just fine. In fact you could buy a Windows N Edition with IE or Media Player removed, I don't remember which.

Quote:

So then came the ballot box and MS being forced to offer multiple browsers. Apparently nobody at the EU ever thought to check to see if MS was maintaining compliance. What do all those enforcers do all day? Look at porn?

I don't know, maybe actually trying to run the socialist commie EU?

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Recent developments make a mockery of this whole process. What applies to one should apply to all. Now we got Chrome OS and Firefox OS where the browser is the OS!

No. Microsoft was found guilty of monopoly abuse and this is why they had their ballot forced on them. All those other companies don't have a monopoly and are competing fairly. So no, there's no reason why a ballot should be in these OSes.

Because (a) we are talking about consumers and (b) the use of RIM in corporate space skews the map.

Quote:

Because that system is operating and always has operated in a MORE competitive market, where non-obscure alternative systems were available and consumers were not hurting for choice. Get back to me when every phone app, mobile website, or piece of digital music is coded specifically for iDevices and carriers aren't allowed to ship Android handsets if they offer iPhones.

Because that system is operating and always has operated in a MORE competitive market, where non-obscure alternative systems were available and consumers were not hurting for choice. Get back to me when every phone app, mobile website, or piece of digital music is coded specifically for iDevices and carriers aren't allowed to ship Android handsets if they offer iPhones.

Oh no, it's relevant. I believe his point is that Windows/IE/Office is a special case because it was the only viable option a decade ago, due to Microsoft's business practices. Do you get this? The ONLY OS you could use to work on and view the internet correctly, whether you liked it or not. By contrast, today's operating systems use open standards, and have an evenly distributed market share.

Because (a) we are talking about consumers and (b) the use of RIM in corporate space skews the map.

No we weren't, and no it doesn't. MS's decisions in the Browser Wars impacted both average users AND businesses. Why should we introduce yet another dissimilarity into the comparison? Even taking RIM out of the picture, look at Symbian. That was for consumers and business.

Quote:

Quote:

Because that system is operating and always has operated in a MORE competitive market, where non-obscure alternative systems were available and consumers were not hurting for choice. Get back to me when every phone app, mobile website, or piece of digital music is coded specifically for iDevices and carriers aren't allowed to ship Android handsets if they offer iPhones.

So your argument for "closed systems are more competitive" is "because I'm not going to answer the question you asked and will instead say some irrelevant stuff"

If you don't see what "a competitive market" has to do with abuse of monopoly and anti-competitive practices, that's your problem and not mine.

Sorry, I'd tell the EU to f*ck off. They have bigger things to worry about besides browser choice. Not sure why MS even agreed to that in the first place.The user can open IE and install any browser if they wish. I doubt folks in the EU need their hand held in this scenario.Do Macs come with anything besides Safari?

This is nothing but an EU shakedown for money to temporarily finance their bankrupt socialist governments. I am sure Ballmer and company are really pissed off but they are just rolling over on this. It is the cost of doing business in the EU. Just consider it another bribe or graft needed to grease the wheels of commerce in the EU.

Ironically, Microsoft wasn't going to bundle any browser in the EU when the EU made a big stink of this. But the EU didn't like that! So then came the ballot box and MS being forced to offer multiple browsers. Apparently nobody at the EU ever thought to check to see if MS was maintaining compliance. What do all those enforcers do all day? Look at porn?

Recent developments make a mockery of this whole process. What applies to one should apply to all. Now we got Chrome OS and Firefox OS where the browser is the OS!

What a lot of USians apparently don't get is that 500M $ is pocketchange for the EU. The EU is still the worlds biggest economy. It must be hard to grasp when your so busy waving flags and shooting guns but the EU is not some small backwater-economy.

They should just build the cost of EU compliance into the products they sell in the EU. I get flamed for saying this, but why should the rest of the world pay? It's not like Bill and Steve are heading to the bank for this money - MS is funding it from revenue, and IMO it should be funded from EU revenue.

That would be great if that means more expensive products, as it would make alternatives to Microsoft's products even more viable in the EU.

OEMs bear essentially all of the consumer support costs for the Windows PC systems they sell. These include the cost of handling consumer complaints and questions generated by Microsoft's software. Pre-installing more than one product in a given category, such as word processors or browsers, onto its PC systems can significantly increase an OEM's support costs, for the redundancy can lead to confusion among novice users. In addition, pre-installing a second product in a given software category can increase an OEM's product testing costs. Finally, many OEMs see pre-installing a second application in a given software category as a questionable use of the scarce and valuable space on a PC's hard drive.

Some more justification from later on:

Quote:

An OEM remained free to place an icon on the desktop that a user could click to invoke an alternate user interface. Plus, once invoked, the interface could be configured to load automatically the next time the PC was turned on. This mode of presentation proved to be much less effective than the one Microsoft foreclosed, however, for studies showed that users tended not to trouble with selecting an alternate user interface; they were content to use the interface that loaded automatically the first time they turned on their PCs.

Quote:

Still, the availability of space for added icons did not make including a Navigator icon inexpensive for OEMs. Given the unavoidable presence of the Internet Explorer and MSN icons, adding a Navigator icon would increase the amount of Internet-related clutter on the desktop. This would lead to confusion among novice users, which would in turn increase the incidence of support calls and product returns.

Quote:

Although the Windows 98 OEM license does not forbid the OEM to set Navigator as the default browsing software, doing so would fail to forestall user confusion since, as the Court found in the previous section, Windows 98 launches Internet Explorer in certain situations even if Navigator is set as the default.

n some cases, however, Windows 98 uses IE 4 Web browsing even if the user has specified another browser as the Default Browser. There are several situations in which this can occur. First, when the user initiates the Web Help function described in paragraph 36, and chooses the option of clicking on the "Support Online" link, the system will always initiate IE Web browsing, instead of launching the Default Browser, to go to the Support Online Web site. Second, certain menus in Windows Explorer contain URL Shortcuts created by Microsoft. A user who selects the "Home Page" or "Search the Web" URL Shortcut found in the "Go" menu in Windows Explorer will always initiate IE Web browsing to go to the particular Web site, rather than launching the Default Browser. Third, if a user places a Web page on the Active Desktop, and then clicks on a Web link on that page, this action will again initiate IE Web browsing even if the user has designated another browser as the Default Browser. Finally, Windows Explorer allows a user to type into the Address Bar a command to search the Web. Typing the word "Go" followed by a phrase or word that a user wants to search for on the Web will initiate IE Web browsing to display the response to the search request, regardless of the user's choice of Default Browser.

Judge Jackson himself stated:

Quote:

Refusing to offer OEMs a browserless (and appropriately discounted) version of Windows forces OEMs to take (and pay for) Internet Explorer, but it does not prevent a determined OEM from nevertheless offering its consumers a different Web browser.

This was the prohibitions Microsoft put on the OEMs:

Quote:

First, Microsoft formalized the prohibition against removing any icons, folders, or "Start" menu entries that Microsoft itself had placed on the Windows desktop. Second, Microsoft prohibited OEMs from modifying the initial Windows boot sequence. Third, Microsoft prohibited OEMs from installing programs, including alternatives to the Windows desktop user interface, which would launch automatically upon completion of the initial Windows boot sequence. Fourth, Microsoft prohibited OEMs from adding icons or folders to the Windows desktop that were not similar in size and shape to icons supplied by Microsoft. Finally, when Microsoft later released the Active Desktop as part of Internet Explorer 4.0, it added the restriction that OEMs were not to use that feature to display third-party brands.

It should be noted that several OEMs were, at this point, either displaying alternate shells to the Windows desktop or inserting wizards that would sign you up to a dial-up provider - a particular concern for Microsoft, since it wanted a consistent experience with Windows and less annoyance for the consumer (thus the second and third rules.) The fifth rule was presumably so companies wouldn't use Active Desktop for advertising (thus subverting it as a user feature.)

Microsoft never disbarred OEMs from installing a second browser, and did not stop them from adding their shortcuts to the desktop (as long as they weren't larger than IE's shortcut and didn't run on startup.) The problem was when Internet Explorer became an irremovable part of Windows that the OEMs could not hide (e.g. from the desktop), and that before then (1996-1997) Microsoft gave discounts to OEMs that installed IE as default.

(Annoyingly, instead of just forcing Microsoft to allow OEMs to remove IE from the desktop, make the hardcoded links use the default browser instead, and bar Microsoft from discounting Windows for IE, Jackson ordered that OEMs get free reign over the startup process and shortcuts they provide, which gave us the age of crapware.)

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TechGeek wrote:

LordDaMan wrote:

They *never* did that. Not once. What they did was tell the OEMS they had to include the IE icon on the desktop along with anything else.

You're wrong. Thats exactly what they did.

Except it's not, and no he isn't.

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They even agreed not to do it anymore in their settlement in the US

No they didn't. They agreed not to restrict OEM's cusomisation, especially in spaces Microsoft competes with.

But MS should have known the EU would react this way. It's in-line with everything they've done before. Why didn't they fix this problem? Surely someone had pointed it out to them?

Not surely at all.

Microsoft claims that the reason it lasted 15 months is that nobody pointed it out. When the EU actually pointed it out to Microsoft, they fixed it the next day, and rolled it out in the next Windows Update batch.

Now, that doesn't change the technical aspect of the violation. It was up to Microsoft to comply with the agreement -- regardless of whether or not anyone outside Microsoft complained about it. Whichever lawyer at Microsoft was responsible for enforcing the agreement should be fired for failing to do his job.

But it greatly changes the context, and raises a lot of questions. I bet if a lawyer from Google wrote a letter to a lawyer at Microsoft, this would also have gotten the problem fixed in one day. Did they do that, or did they hang back and then sic the EU on them? Same goes for Mozilla, Opera, etc. What was the timeline of complaints? Mozilla provided a graph to the EU, showing that their downloads fell after SP1 rolled out. All links from the Browser Choice Screen have a referral field of browserchoice.eu -- so Mozilla should've noticed that links from browserchoice.eu were dropping to zero.

Many browsers weren't free when this was going on. Netscape and Opera charged for theirs, like any other software product, and built their businesses around sales.

Not technically true. The correct statement is that many browsers weren't free when this was instituted. Consumer browsers have been freeware for over a decade (Opera went free in 2000 and Netscape officially died in 2008), and definitely for the past two years (you know, when EU claims the violation happened). Unless you can demonstrate a consumer browser that isn't freeware that is.

The agreement has been realistically invalid for years and that the EU is enforcing it to the tune of a fuckton of money for a violation a year ago is a farce.

Here's the deal. Firefox estimates that they lost 5mil downloads due to the ballot box not being there. And as we all know, that Mozilla derives revenues from the number of users of their browser.That means that Firefox did not get the revenues, because of Microsoft's actions(or mistakes). While Microsoft gained marketshare.What does IE default to? Bing and other Microsoft sites(as expected, I have little issues there) and they do derive revenues when people use BIng.Therefore, Microsoft not having that ballot box had ill-gained revenues.

Just because you think it's invalid to say that Microsoft maintains a higher than a competitive market would provide desktop browser marketshare, does not make the agreement any less valid or binding.

You are right on one issue - this was not in a time when the browsers were sold. But this is during the time when companies behind the browsers got paid when people used their browsers. So Microsoft increasing or maintaining their high desktop browser marketshare did have a negative effect on competition in desktop browser space.

I work for Microsoft and a lot of times people ask me why MS doesn't bundle more apps with the OS like Apple does, and wouldn't that be great for the user. This is why!

Until recently, Microsoft didn't sell computers.

Doesn't Surface RT come bundled with Office?

Bundling Office with Surface RT is a great step forward, and actually your differentiation between selling an OS and selling a computer makes me realize that this was probably only possible because in this case MS is the hardware OEM. Personally, I don't think this the OEM vs OS should be the deciding factor between who's allowed to bundle what. People buy a Dell, but they are frustrated at Microsoft when they don't have as rich of an out-of-box experience as with an Apple due to lack of inbox apps.

Look at Windows Essentials. Photo Gallery, Movie Maker, Instant Messenger - don't these seem like pretty good candidates for something you should get with an OS? Thanks to the EU, Microsoft has to offer these as downloads, with many users never realizing that they even exist. When somebody asks you why Windows has no iPhoto or iMovie equivalent, and you have to explain it by saying, well, back in the day when Netscape cost money...you start to realize that there is no good, logical reason.

Poor, poor Microsoft. Sitting there in the corner with the dominant position in desktop software...Raking in billions of dollars.

The ballot box(that Microsoft, themselves, proposed) was supposed to be their penance. They, however, screwed it up; so that was replaced by a fine. They were never fined before for their browser market disruption by EU.

Your analogy is a bit off. I'll fix it for you. Basically I got pulled over a year ago for going 70 in a 40, and in a plea with the judge I said I'd never drive above 40 in that zone again. Problem is, the speed limit was raised to 50 and I got pulled over a year later for going 50 in a 50.

No. That would be that case if the settlement's conditions expired.In your case, it would be if in the plea you would be sentenced to 400 hours of community service in the next 6 months instead of $5000 fine(or something like that). But you "forgot" and only showed up for 200 out of 400. As a result, the judge said that you now have to pay the appropriate proportion of your missed penance in fines.

There's nothing to complain about. Everything that Microsoft is suffering is Microsoft's own fault. It stems directly from Microsoft's refusal to obey the law and then, when caught, refusing to even comply with the terms of their punishment.

I'm complaining the terms were idiotic on their face and never should have been proposed or agreed to.

Again. It's still all Microsoft's own making. They proposed the ballot box and then agreed to it. PERIOD.

It scares the shit out of me how many people in this thread have your attitude that because it's the law then it should never be questioned. We know Microsoft broke the law. That doesn't mean the law isn't bullshit.

The law allows for settlements. This is a settlement, not the law. The fines come as a result of Microsoft breaking the settlement. Breaking the settlement allowed for the other provisions of the law to take effect.

I work for Microsoft and a lot of times people ask me why MS doesn't bundle more apps with the OS like Apple does, and wouldn't that be great for the user. This is why!

Until recently, Microsoft didn't sell computers.

Doesn't Surface RT come bundled with Office?

Bundling Office with Surface RT is a great step forward, and actually your differentiation between selling an OS and selling a computer makes me realize that this was probably only possible because in this case MS is the hardware OEM. Personally, I don't think this the OEM vs OS should be the deciding factor between who's allowed to bundle what. People buy a Dell, but they are frustrated at Microsoft when they don't have as rich of an out-of-box experience as with an Apple due to lack of inbox apps.

Look at Windows Essentials. Photo Gallery, Movie Maker, Instant Messenger - don't these seem like pretty good candidates for something you should get with an OS? Thanks to the EU, Microsoft has to offer these as downloads, with many users never realizing that they even exist. When somebody asks you why Windows has no iPhoto or iMovie equivalent, and you have to explain it by saying, well, back in the day when Netscape cost money...you start to realize that there is no good, logical reason.

Or you could tell them the truth by saying, well, back in the day when Microsoft didn't innovate, they did a lot of illegal things to keep competition out.

why should a computer have to offer a choice of browser but in a phone it is take what u r offered wether u like it or not. In fact u invalidate the phone license if you are found to have switched. No wonder microsoft is trying to get into phones with windows 8. If it has a multi core cpu and can get on the internet it is a computer wether it is mobile like a laptop or phone, or not.

Disclaimer: I am not a lawyer, this is not legal advice but my interpretation of the law.

While Cartigan's approach might be scattershot, I do believe some of his arguers (and he himself) are missing some things.

1) Many laws have something known as a statute of limitations. Statutes of limitations put a limit on how much time may elapse between committing an infraction and bringing that infraction to court. They exist because a) it's seen if a entity takes too long to file a lawsuit, especially when a clear offence has taken place, they are acknowledging that said harm was inconsequential enough that they didn't feel the need to file a lawsuit immediately, and/or b) such potential harms caused by the defendant may have corrected themselves over the period of time they took to file the lawsuit. The first is the reason Xerox could not sue Apple for copyright infringement in the 1990s - the statute of limitation for copyright infringement had already passed, despite the ongoing harm Xerox was sure to have alleged Apple was inflicting them.

Consequentially, the statute of limitations for antitrust action in America is four years from the act covered in the lawsuit. (15 USC § 15b) In the EU, the statute of limitations is five years. (EU Competition Law handbook, Chapter VII, Article 25)

"Heinous crimes", such as murder and rape, are not covered by statutes of limitations - the damage caused by such crimes is seen as permanent, and evidence of the perpetrator often less concrete. Thus they are in no way comparable to antitrust.

However, this is irrelevant, as the EU makes it clear that they are not accusing Microsoft for its past crimes in the 90s. Rather, they are accusing them of ongoing infringement. The EU's press release on the matter states:

Quote:

The evidence gathered during the investigation leads the Commission to believe that the tying of Internet Explorer with Windows, which makes Internet Explorer available on 90% of the world's PCs, distorts competition on the merits between competing web browsers insofar as it provides Internet Explorer with an artificial distribution advantage which other web browsers are unable to match. The Commission is concerned that through the tying, Microsoft shields Internet Explorer from head to head competition with other browsers which is detrimental to the pace of product innovation and to the quality of products which consumers ultimately obtain. In addition, the Commission is concerned that the ubiquity of Internet Explorer creates artificial incentives for content providers and software developers to design websites or software primarily for Internet Explorer which ultimately risks undermining competition and innovation in the provision of services to consumers.

The clear use of present tense throughout the article makes it plain that the European Commission is talking about abuse in 2009 and before, not in the 90s.

In any case, competition law does not require there to be a monopoly for market harm to occur. Rather, the accused must only have enough power over the market to cause widespread damage to the market. For example, although Apple does not have a monopoly over the eBook business, their agreements with publishers caused market harm to Amazon, who could no longer set their prices to be lower than Apple's, as well as other eBook readers.

Apple only allows Safari and Safari shells on its phone. As a result, many websites code mobile standards using Safari as the reference, due to the perceived popularity of the iPhone. Apple also controls the rendering engine (Webkit) of its nearest competitor, Android's Chrome browser (although it could be rightfully argued that Google could just fork the code - the question then becomes whether Apple will do anything in retaliation.)

There are two things that could be used against Apple:

i) As a result of coding to Safari, many webapps use Apple's proprietary Touch Events API exclusive to anything else. This has resulted in websites not working on otherwise perfectly functional web browsers (such as IE for Windows Phone). Apple has also threatened patent lawsuits against other browsers implementing this API. Safari also refuses to adopt Microsoft's competing Pointer Events API - the only browser to do so - and has attempted to belay its adoption by the W3C.

ii) The fact that Opera Mobile has recently switched to Webkit indicates that a) Webkit is now seen as the standard on the mobile web, and b) Opera sees itself as unable to compete if it maintains its own browser engine. (This is the weaker of the arguments, but I include it for completeness' sake.)

Do I think it could be the basis of an antitrust suit against Apple? I don't know, but if they could sue Microsoft for Windows Media Player, I'm sure if they wanted to they could find a way.

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As for the fine, while Microsoft did willingly enter into this agreement with the EC, €561 million seems to be a bit excessive for what seems like an accident (and one that wasn't pointed out for 14 months at that). Remember that the €800 million fine the EC gave Microsoft in the 2004-2007 lawsuit for bundling WMP and lack of documentation of some APIs and protocals was the largest the EC had handed out at that time for breaking its competition laws. I guess the point is a don't do it again for a large company, but it does seem disproportionate.

OEMs bear essentially all of the consumer support costs for the Windows PC systems they sell. These include the cost of handling consumer complaints and questions generated by Microsoft's software. Pre-installing more than one product in a given category, such as word processors or browsers, onto its PC systems can significantly increase an OEM's support costs, for the redundancy can lead to confusion among novice users. In addition, pre-installing a second product in a given software category can increase an OEM's product testing costs. Finally, many OEMs see pre-installing a second application in a given software category as a questionable use of the scarce and valuable space on a PC's hard drive.

Some more justification from later on:

Quote:

An OEM remained free to place an icon on the desktop that a user could click to invoke an alternate user interface. Plus, once invoked, the interface could be configured to load automatically the next time the PC was turned on. This mode of presentation proved to be much less effective than the one Microsoft foreclosed, however, for studies showed that users tended not to trouble with selecting an alternate user interface; they were content to use the interface that loaded automatically the first time they turned on their PCs.

Quote:

Still, the availability of space for added icons did not make including a Navigator icon inexpensive for OEMs. Given the unavoidable presence of the Internet Explorer and MSN icons, adding a Navigator icon would increase the amount of Internet-related clutter on the desktop. This would lead to confusion among novice users, which would in turn increase the incidence of support calls and product returns.

Quote:

Although the Windows 98 OEM license does not forbid the OEM to set Navigator as the default browsing software, doing so would fail to forestall user confusion since, as the Court found in the previous section, Windows 98 launches Internet Explorer in certain situations even if Navigator is set as the default.

n some cases, however, Windows 98 uses IE 4 Web browsing even if the user has specified another browser as the Default Browser. There are several situations in which this can occur. First, when the user initiates the Web Help function described in paragraph 36, and chooses the option of clicking on the "Support Online" link, the system will always initiate IE Web browsing, instead of launching the Default Browser, to go to the Support Online Web site. Second, certain menus in Windows Explorer contain URL Shortcuts created by Microsoft. A user who selects the "Home Page" or "Search the Web" URL Shortcut found in the "Go" menu in Windows Explorer will always initiate IE Web browsing to go to the particular Web site, rather than launching the Default Browser. Third, if a user places a Web page on the Active Desktop, and then clicks on a Web link on that page, this action will again initiate IE Web browsing even if the user has designated another browser as the Default Browser. Finally, Windows Explorer allows a user to type into the Address Bar a command to search the Web. Typing the word "Go" followed by a phrase or word that a user wants to search for on the Web will initiate IE Web browsing to display the response to the search request, regardless of the user's choice of Default Browser.

Judge Jackson himself stated:

Quote:

Refusing to offer OEMs a browserless (and appropriately discounted) version of Windows forces OEMs to take (and pay for) Internet Explorer, but it does not prevent a determined OEM from nevertheless offering its consumers a different Web browser.

This was the prohibitions Microsoft put on the OEMs:

Quote:

First, Microsoft formalized the prohibition against removing any icons, folders, or "Start" menu entries that Microsoft itself had placed on the Windows desktop. Second, Microsoft prohibited OEMs from modifying the initial Windows boot sequence. Third, Microsoft prohibited OEMs from installing programs, including alternatives to the Windows desktop user interface, which would launch automatically upon completion of the initial Windows boot sequence. Fourth, Microsoft prohibited OEMs from adding icons or folders to the Windows desktop that were not similar in size and shape to icons supplied by Microsoft. Finally, when Microsoft later released the Active Desktop as part of Internet Explorer 4.0, it added the restriction that OEMs were not to use that feature to display third-party brands.

It should be noted that several OEMs were, at this point, either displaying alternate shells to the Windows desktop or inserting wizards that would sign you up to a dial-up provider - a particular concern for Microsoft, since it wanted a consistent experience with Windows and less annoyance for the consumer (thus the second and third rules.) The fifth rule was presumably so companies wouldn't use Active Desktop for advertising (thus subverting it as a user feature.)

Microsoft never disbarred OEMs from installing a second browser, and did not stop them from adding their shortcuts to the desktop (as long as they weren't larger than IE's shortcut and didn't run on startup.) The problem was when Internet Explorer became an irremovable part of Windows that the OEMs could not hide (e.g. from the desktop), and that before then (1996-1997) Microsoft gave discounts to OEMs that installed IE as default.

(Annoyingly, instead of just forcing Microsoft to allow OEMs to remove IE from the desktop, make the hardcoded links use the default browser instead, and bar Microsoft from discounting Windows for IE, Jackson ordered that OEMs get free reign over the startup process and shortcuts they provide, which gave us the age of crapware.)

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TechGeek wrote:

LordDaMan wrote:

They *never* did that. Not once. What they did was tell the OEMS they had to include the IE icon on the desktop along with anything else.

You're wrong. Thats exactly what they did.

Except it's not, and no he isn't.

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They even agreed not to do it anymore in their settlement in the US

No they didn't. They agreed not to restrict OEM's cusomisation, especially in spaces Microsoft competes with.

I think we are trying to split hairs here. You just listed all the things that Microsoft did to prevent Netscape from being installed. Why was it not installed? Because Microsoft knew that OEM's would only ship one of any kind of program. And if they mandated IE, it would exclude Netscape. If you do some more reading of the findings of fact, you will see that OEM's WANTED Netscape. It had 80% of the market at the time. The only reason why that didn't continue is because of Microsoft's mandates. Even people at Microsoft are on record saying that its the only way they ccould win. If that's not prevention, I don't know what is. Sure, the OEM's could have gone to retail licenses. But we know in reality that it would have put them out of business.

"The government will seek rules that allow computer makers to choose among rival software products rather than being forced to take what Microsoft demands when it licenses its widely popular Windows operating system software, among other provisions, those close to the case said.

Software features or programs will be covered under the government's approach if they are seen as potential threats to Windows, these lawyers said. This category of products is almost certain to include Internet browser software and Sun Microsystems Inc.'s Java software, which were both cited by the court as having been targeted by Microsoft, along with other current and future technology that may threaten the Windows monopoly."

Microsoft denied licenses based on OEMs removing Internet explorer . They never once denied a license for people including another browser

Ill grant you that it wasn't done explicitly. However, Microsoft knew that OEMs would only want one browser on the computer due to increased hard drive space usage and increased support costs. So by mandating that they include IE, they were effectively shutting out Netscape.

The problem weren't that Internet Explorer were bundled with the OS,the problem were that it were not possible to remove completely from the OS, and if you chose to use a different browser in your settings, as your standard browser, some Windows-programs such as Windows Mail would choose to open up IE instead if you opened a web-link, and ask if you wanted to use this browser as standard browser, instead of the browser you had allready selected as your standard browser.

It were superannoying, but I've faced none of these issues after the ballot came in place. The only times I use something else than Opera now, is when I'm away from home.

This fine is stupid. Yes, the court found this and decided that and negotiated terms and that's the way things are, but fundamentally the decision was wrong in the first place. Microsoft providing a browser and not providing users the option to install another one was simply never a problem. A few years before Netscape was complaining about Microsoft providing an in-box browser, it was Novell complaining about an in-box network stack. They argued along almost exactly the same lines, that they had a network stack which they sold as a product and Microsoft's inclusion of one with their operating systems gave them an unfair advantage over Novell.

Now, ask yourself this: Would it be better if operating systems were not allowed to have a TCP stack included out of the box and instead required you to select one from a ballot on install? How about other drivers? How about web servers? Windows comes with IIS. Should they also offer the option to install alternatives? What about default VGA drivers. What about simple document readers, should there be a ballot where you choose between Wordpad and Emacs? I get that this decision happened and that they're being fined for violating the terms of it but if one assumes that the line of reasoning is even vaguely sane, the logical conclusion is that Windows needs a few hundred more ballots displayed during installation for everything from command line tools to scripting languages (Windows comes with Powershell, should they offer Python as an alternative? Perl?) to text readers to browsers to media players. Dumb. The EU could have saved face and said, "You know, we made a mistake. Times change and today's OS reach is tomorrow's OS minimum bar. Nevermind." Instead, they're sticking to a decision which was laughable when it was made, and not looking any less dumb with age.

The fine is reasonable.Microsoft were abusing the browser-request functionality after they built IE into windows.They made various programs open the OS-browser instead of the user-selected browser asosciated with the html-filetype.Also several other times, I recall if you struggled to get on the internet due to errors, and you chose to open a help file, Internet Explorer pops up, and first thing wich comes up is, 'hey, IE is not your standard browser, want to set this as your browser?'.In short, they used every oportunity to have IE as your internet browser, just because MS had built it into windows, and could call on it for whatever things they could think of, no matter if it were on the internet or local.

They're not forcing users to open a JPG-file in MSPaint, if people have selected files asosciated with that to open in Photoshop, and they're not forcing users to open office documents in Wordpad, if they've selected those programs to open in Open Office. And if people have selected other programs, they seem to respect those choices.. They didn't with browsers.

That's why the complaint were filed, and EU threatened to fine MS unless they took action, and a browser selection were the 5 most popular browser were given, were the option MS chose to go with.

The fact that a free product that can be freely and easily changed is worth suing over shows that people are giving way too much of their money to the government to completely spend it in inappropriate and wasteful ways.

That "free product" was actually worth hundreds of billions of dollars to Microsoft, because it along with MS' tactics successfully crippled the competition and promoted non-standard Windows-only technologies. Not only did this slow down evolution of web technologies for a good 5-10 years, it also aided in locking in millions of users to the Windows platform. The effects of this are *still* being felt today, 10+ years later. Microsoft rightly predicted the web itself would become a platform that competes with Windows, and successfully managed to delay this. Just because something is given away for "free" doesn't mean it has no value to the company nor ability to cause damage.

Lithuania orders Microsoft to put Clippy back into the OS. MS agrees to do it for OSs sold in Lithuania. MS then does a worldwide rollout of a service pack that accidentally deletes old Clippy in Lithuania. Lithuania fines Microsoft a gazillion dollars. This is more about Lithuania needing money to pay for its failed welfare state than anything else.